Market Overview 11th Jan 2012

Wednesday, 11th Jan 2012. Stock index was traded unchanged yesterday as there was less follow thru Buying activities accompanied by thin trading volume. Other news to follow.

"-U.S. stocks on Tuesday climbed along with the euro as a weaker U.S. currency helped drive up the price of oil, other dollar-denominated commodities and resource stocks. The Dow Jones Industrial Average and S&P 500 Index closed at late July highs. After a 122-point jump earlier in the day, the Dow industrials DJIA +0.56%  closed up 69.78 points, or 0.6%, at 12,462.47, its highest close since July 26. The S&P 500 SPX +0.89%  gained 11.38 points, or 0.9%, to 1,292.08, with financials and natural-resource companies faring best among its 10 industry groups. Extending gains into a fourth session, the Nasdaq Composite Index COMP +0.97%  gained 25.94 points, or 1%, to 2,702.50."

 "- Asian shares ended higher on Tuesday as mainland Chinese stocks rallied for a third straight session on hopes Beijing will come to investors’ rescue after last year’s market slump. The Shanghai Composite Index CN:000001 +2.69% ended the day at 2,285.74, rising 2.7% Tuesday on top of the previous day’s 2.9% jump. The Shenzhen Composite climbed ever more, rising 3.9% to 880.86. The performance also lent support to other regional markets, lifting Hong Kong’s Hang Seng Index HK:HSI +0.73%  0.7% to 19,004.28. The Hang Seng China Enterprises Index — an index of several mainland Chinese stocks traded in the city — scored a more impressive gain of 1.8% to 10,413.61. Elsewhere in the region, Australia’s S&P/ASX 200 index AU:XJO +1.14% ended 1.1% higher to 4,152.20 and South Korea’s Kospi KR:0100 +1.46%  advanced 1.5% to 1,853.22. Japan’s Nikkei Stock Average rose 0.4% to end at 8,422.26, as investors returned from a three-day weekend after Monday’s holiday."

"-Crude futures gained Tuesday as traders cheered higher U.S. stocks and a lower dollar, while ongoing geopolitical tensions helped keep prices firmly in the triple digits. Crude for February delivery CL2G -0.36%  added 93 cents, or 0.9%, to settle at $102.24 a barrel on the New York Mercantile Exchange."

"-US soybean futures ended slightly lower, managing to rebound from early session losses. Profit-taking following yesterday's sharp rally and traders evening trades ahead of Thursday's USDA crop reports attracted selling interest, analysts say. Rains moving through drought stricken areas of South America added pressure to encourage traders to reduce risk exposure, analysts add. Otherwise, traders took a cautious approach allowing prices to consolidate within recent trading ranges. CBOT March soybeans end down 1c at $12.32/bushel. Soy product futures ended mixed, with soyoil extending Monday's rally. Spillover support from higher crude oil futures and the unwinding of some long soymeal/short soyoil trades buoyed soyoil futures, analysts say. Soymeal futures drifted lower, succumbing to light selling after yesterday's sharp gains. CBOT March soyoil ended up 0.17c at 52.50c/pound, and March soymeal finished down $1.00 at $322.50/short ton."

FKLI- Trapped In The Range.

Stock index finished literally unchanged yesterday despite Asia benchmark were mostly ended higher on positive earning results announcement on United States companies. This is the month where most of the important yearly economy data and full quarter earning results will be announce. My early assessment for the trading range on index futures should remain intact unless there is any major news happen overnight. Technically, the index futures is expected to retrace soon when it approach the resistance area around 1,532~1,535 as shown on the hourly chart above. Plus there was no significant increase on the volume and open interest when the market approach this resistance level, signifying less participants or force to push the index above this resistance area. If the market does retrace today, we are expecting it to retrace about 12~18 points from yesterday's high at 1,531 level. Pivot points for support level is located around 1,519 while resistance is pegged around 1,535 level.

Daily Pivot Point
R2= 1535
R1= 1531
S1= 1523
S2= 1519

 FCPO- Open Gap Up But Closed Lower For Profit Taking

CPO futures ended unchanged for the second consecutive times yesterday after it open higher on the morning session amid substantial recovery on the Soya oil futures. Although that most of us might felt that the velocity on palm oil futures price's climb is actually lagged behind Soya oil futures recently, but the discount between Soya oil and palm oil were narrowed to USD135 apart (by using the soya oil vs palm oil spread). On the surface, it tells that the palm oil price is USD135 cheaper than Soya oil (One metric ton) but the reality is palm oil price is more expensive (Average discount is about USD200) than it use to be at the moment. Technically, the positive momentum on benchmark Mar is likely pause at the moment as there was less follow thru Buying activities when the market open higher yesterday. Rationally speaking, most trading participants prefer to unload their Long holding when the price goes up rather to accumulate more Long positions as there were rumors that circulated on lower export expectation from ITS and SGS yesterday. Although the medium term uptrend is still intact, market is showing of trend pausing and I believe the benchmark Mar should trap within 3,248~3,178, maybe at least for this week. For today, pivot point for support is located around 3,189 while resistance is pegged at 3,234.   

Daily Pivot Point
R2= 3253
R1= 3234
S1= 3202
S2= 3189

Disclaimer: Information and opinions contained in this report are for educational purposes only. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness.